It is believed that emergent stem cell-based therapies are destined to replace islet transplantation in the near future. The first wave of next-generation cell therapeutics for type 1 diabetes (T1D) will likely take the shape of pluripotent stem cell (PSC)-derived pancreatic progenitors (PPs) that mature into insulin-producing cells upon transplantation. However, for all its promise, the success of this approach hinges on the assumption that the microenvironment that leads to effective maturation in a mouse model (which is not even diabetic at the time of transplantation in published reports) will be the same i human patients with autoimmune diabetes. Other considerations, such as the safety of partially differentiated PSC-derived products and lag time to functional maturation, will also have to be addressed. The use of fully differentiated insulin- producing cells has always been the first choice, but the above approach has prevailed owing to the inability of current culture standards at yielding functional cells. In collaboration with our partners at the University of Miami, Ophysio, Inc. has successfully developed a platform to aid in the terminal in vitro differentiation of PPs of different origins (PSC and native PPs). This patented technology is based on the accurate targeting of physiological oxygenation throughout cell aggregates in culture - which conventional means of culture fail to achieve. Oxygen tension lies at the crossroads of key pancreatic differentiation pathways, and its evolution throughout development has been conclusively shown to drive cell fate. Here we seek to apply these principles to the terminal maturation of a novel sub-population of PPs that our collaborators have described in human non-endocrine pancreatic tissue (hNEPT), which comprises 98% of the pancreas and is routinely discarded after islet isolation. This sub- population, unequivocally identified through i vitro lineage-tracing techniques, is characterized by its responsiveness to the FDA-approved bone morphogenetic protein 7 (BMP-7). hNEPT exposure to BMP-7 results in the efficient (up to 33% in preliminary data) generation of endocrine cells that secrete insulin in response to glucose stimulation in vitro and in vivo at levels that, under conditions that will be further explored in this proposal, approximate those of human islets. BMP-7-responsive PPs from hNEPT represent a valid alternative to PSC for clinical applications, as this technology capitalizes on current clinical strategies (islet isolation and transplantation) for which there ar already well established networks; increased safety of adult stem cell products vs. PSC-derived ones; and ease of in vitro expansion using a single, FDA-approved agent that is already in clinical trials for unrelated conditions. Coupled with Ophysio's technology for enhanced in vitro maturation, this approach has rapid translational potential for the effective treatment of T1D.